Sonoco to sell thermoformed and flexibles packaging business to Toppan for $1.8bn

Sonoco Products Company, a global packaging leader renowned for its sustainable packaging solutions, announced a definitive agreement to sell its Thermoformed and Flexibles Packaging (TFP) business to Japan-based Toppan Holdings Inc. for approximately $1.8 billion. This divestiture aligns with Sonoco’s portfolio simplification strategy, enabling the company to strengthen its core business focus and streamline global operations.

The cash-free and debt-free agreement, subject to regulatory approvals and other customary conditions, is expected to close in the first half of 2025. Sonoco plans to allocate the net proceeds from the sale of its Thermoformed and Flexibles Packaging division toward repaying existing debt, bolstering its financial resilience.

Howard Coker, President and CEO of Sonoco, highlighted the strategic rationale behind the decision, emphasizing its alignment with long-term goals to focus on high-value growth areas. He noted that the move will support the company’s mission to deliver cutting-edge sustainable packaging solutions while simplifying its organizational structure.

A Strategic Milestone for Sonoco

The sale of the Thermoformed and Flexibles Packaging segment represents the culmination of Sonoco’s ongoing portfolio simplification strategy. This key decision underscores Sonoco’s commitment to its core business focus, particularly in industrial paper and consumer packaging, areas that are pivotal to its reputation as a global packaging leader. With net sales reaching $6.8 billion in 2023, Sonoco remains dedicated to advancing its sustainable packaging solutions and creating value for its stakeholders.

Toppan’s Expansion Strategy

For Toppan Holdings, acquiring the Thermoformed and Flexibles Packaging division is a significant step in its global expansion strategy. The addition of TFP strengthens Toppan’s portfolio and reinforces its position as a global leader in innovative and sustainable packaging solutions. Advisors for the transaction include Houlihan Lokey and Mitsubishi UFJ Morgan Stanley Securities, while Morrison & Foerster LLP serves as legal counsel.

Sonoco’s advisors for the sale are Goldman Sachs, RBC Capital Markets, and Freshfields LLP, ensuring a seamless transition for all parties involved.

Industry Implications

This strategic move reflects a broader trend in the packaging industry, where leading companies are focusing on high-value growth areas by streamlining global operations. Sonoco’s divestiture of Thermoformed and Flexibles Packaging aligns with increasing market demands for sustainable packaging solutions and positions the company to lead in industrial paper and consumer packaging innovation.